Changing patterns of poultry production in the European Union

Chapter 2 Changing patterns of poultry production in the European Union H-W. Windhorst Abstract The EU (27) is one of the leading global regions in egg and poultry meat production. Production is, however, not evenly distributed but shows clusters with a high contribution to the overall production volume and regions with a low share. The organisation of poultry production varies from small farms which produce for local markets to vertically integrated agribusiness companies which supply national and even international markets. After three decades of growth, the number of produced broilers, tur-keys, ducks, and geese decreased between 2000 and 2006 due to the impacts of Avian Influenza out-breaks in some countries and an oversupply on the turkey meat market. A close correlation between the population of a member state and its poultry flocks as well as its egg and poultry meat production can be observed with the exception of the. In spite of a comparatively low population they rank in top positions with regard to production and exports. The consolidation in the poultry industry initiated a regional concentration process. Densely populated poultry areas with a high competitive-ness but also with a high risk regarding the introduction and dissemination of highly infectious dis-eases are the result in several EU member states. 1. Introduction and setting The EU (27) is one of the leading global poultry production regions. In 2006, EU member states con-tributed 66 % to European egg production and 81 % poultry meat production. Their share of the global production volume of hen eggs was 16.4 % and of poultry meat 12.5 %. The organisation of poultry production shows a broad variety from small farms that produce for their own consumption or local markets to large vertically integrated companies that supply national and even international markets. In several of the EU member countries the consolidation of egg and poultry meat production has led to regional production clusters with extremely high densities of animals. Whereas this has on the one hand side contributed to the competitiveness of the regions, the risk of an introduction and dissemina-tion of highly infectious poultry diseases has increased on the other side parallel to the regional con-centration process. High economic losses which resulted from the Avian Influenza outbreak in, the, the United Kingdom and several East European countries made the risk obvious. The main objectives of this chapter are: to give an overview about the development of the number of producing and produced animals between 1980 and 2006; to present the regional patterns of laying hen and poultry meat producing species on a country base; to analyse the development of hen egg and poultry meat production between 1980 and 2006; and to identify the leading countries in hen egg and poultry meat production. 1

To make the data comparable, only the FAO database was used for this overview. In other papers of this report, other datasets will be used. This may result in differences in the used data for species and regions. 2. Development and spatial patterns of producing and produced animals In a first step, this analysis will deal with the development of the number of producing laying hens and of produced meat animals. The data in table 1 shows that the number of animals increased from about 5 billion in 1980 to 6.4 billion in 2006 or by 28.7 %. A closer look reveals, however, that between 2000 and 2006 their number decreased by about 400 million. Whereas the layer flocks recovered from the downward trend, the number of produced broilers, turkeys and ducks decreased in this time period. This is the result of Avian Influenza outbreaks in, the, and the United Kingdom. From 2001 on, turkey meat production in the EU (25) decreased from 2.2 million to less than 1.9 mil-lion t. This is mainly due to the drastic reduction in (- 170,000 t) and (- 93,000 t). During the BSE crisis, turkey production had been expanded in the leading countries because of the growing demand. When, however, In a first step, this analysis will deal with the development of the number of producing laying hens and of produced poultry meat animals. The data in table 1 shows that the num-ber of animals increased from about 5 billion in 1980 to 6.4 billion in 2006 or by 28.7 %. A closer look reveals, however, that between 2000 and 2006 their number decreased by about 400 million. Whereas the layer flocks recovered from the downward trend, the number of produced broilers, tur-keys and ducks decreased between 2000 and 2006. This is the result of Avian Influenza outbreaks in, the, and the United Kingdom. From 2001 on, turkey meat production in the EU (25) decreased from 2.2 mill. t to less than 1.9 mill. t. This is mainly due to the drastic reduction in (- 170,000 t) and consumers turned back to beef, the oversupply in the poultry meat market led low prices which forced the turkey industry to reduce the production volume. It was not before the first quarter of 2008 that the industry could realise profits again. Table 1. Development of producing and produced animals in the EU (27) between 1980 and 2006; data in million animals (Source: FAO database). Species 1980 1990 2000 2006 Change Layers 564 502 444 477-15.4 Broilers* Turkeys* Ducks* Geese*/** 4,234 122 69 15 4,643 203 104 19 5,915 287 163 17 5,537 226 158 21 + 30.8 + 85.2 + 129.0 + 40.0 Total 5,004 5,471 6,826 6,419 + 28.7 * produced animals per year; ** includes guinea fowl. A closer look at the spatial pattern in 2006 (table 2, figure 1) shows that the United Kingdom and are in a leading position, followed by, Spain, and. A close correlation between the population and egg respectively poultry meat production is obvious. One has to consider that the number of producing animals refers to layers at hand and to the number of produced animals per year. Seven growing periods are not unusual in broiler production, even though they may not be reached in all countries. This would mean that about 9 mill. broilers were at hand in the EU member countries in 2006. Goose and duck meat are very often not produced 2

continuously. Here, the flocks can differ considerably between the first and second half of a year, resulting from the fact that more duck and goose meat is consumed in the fall and winter months. Hen egg production in the EU (27) has remained fairly stable between 1980 and 2006. Only in 1990, the production volume decreased for some years because of the economic adaption process in Eastern Europe. Most of the new EU member countries have been able in the meantime to stabilise egg production, this is not the case, however, in and the Czech Republic. In these two countries, the layer population is still decreasing. On the other hand, the Baltic countries, with the exception of Estonia, show high absolute and relative growth rates. Table 2. Producing and produced animals in the EU (27) in 2006; data in 1,000 birds (Source: FAO database). Layers Broilers* Turkeys* Ducks* Geese*/** Total Un. Kingdom 40,472 864,028 23,000 18,567 621 946,688 51,912 634,629 72,748 74,811 469 834,569 50,505 515,000 43,000 21,500 380 630,385 Spain 51,142 560,201 3,500 - - 614,843 51,153 515,000 5,800 7,500 2,000 581,453 30,000 430,000 10,000 7,000-477,000 46,500 372,190 26,797-8,273 453,760 Belgium 13,215 302,000 1,200 - - 316,415 Romania 51,889 171,657 - - - 223,546 Czech Rep. 11,000 159,300 4,300 4,600 780 179,980 15,445 129,046 10,590 15,665 6,636 177,382 Portugal 5,300 154,206 11,250 - - 170,756 Greece 15,500 120,000 500 60 35 136,095 Denmark 3,192 107,697 33 1,636 10 112,568 Ireland 3,600 90,000 4,800 1,200 320 99,920 Sweden 4,500 69,600 650 - - 74,750 Austria 5,450 62,369 1,971 58 76 69,924 Slovakia 5,647 56,910 103 338 57 63,055 Bulgaria 7,364 46,802 14 4,633 123 58,936 Finland 2,600 55,371 - - - 57,971 Slovenia 1,400 46,000 1,100 600 900 50,000 Lithuania 4,219 37,486 4,800 84 54 46,643 Latvia 1,946 13,271 - - - 15,217 Cyprus 1,500 13,529 217 110-15,356 Estonia 720 8,211 - - - 8,931 Malta 472 2,666 35 - - 3,173 Luxembourg 63 76 - - - 139 EU (27) 476,706 5,537,245 226,408 158,362 20,734 6,419,455 Europe 744,914 7,722,530 221,988 158,756 21,214 8,872,136 World 5,628,699 48,789,130 630,768 2,639,278 636,664 58,324,539 EU (27) in % of 64.0 71.7 98.0 99.8 97.7 72.4 Europe EU (27) in % of world 8.5 11.3 35.2 6.0 3.3 12.0 * produced animals per year; ** includes guinea fowl. 3

Table 3. Development of hen egg production in the EU between 1980 and 2006; data in 1,000 t (Source: FAO database). 1980 1990 2000 2006 Change Hen eggs 6,430 6,286 6,617 6,605 + 2.3 A closer look at the spatial pattern of egg production in 2006 (tables 3 and 4, figure 2) shows the close correlation between the production volume and population. As eggs can only be transported as shell eggs over short distances, many countries produce most of their egg consumption within their own borders. This is not true for, Greece, and Ireland. These three countries have the lowest self sufficiency rate of all EU member states. is the leading egg importing country with a share of about 20 % of global egg imports. About 80 % of the imported eggs, about 4 billion per year, come from the. For them, is the most important market, as over 70 % of their exports go to the adjacent country. Table 4. Hen egg production in the EU (27) in 2006 (Source: FAO database). Production (t) 850,000 Spain 850,000 745,752 700,000 595,000 United Kingdom 595,000 537,232 Romania 355,350 Belgium 243,675 161,333 Portugal 121,200 Sweden 101,000 Greece 100,089 Bulgaria 99,167 Austria 90,000 Czech Republic 86,675 Denmark 77,000 Slovakia 70,300 Finland 56,700 Lithuania 53,415 Latvia 33,100 Ireland 32,000 Slovenia 22,000 Estonia 11,202 Cyprus 9,457 Malta 7,285 Luxembourg 1,255 European (27) 6,605,187 Europe 10,021,362 World 61,111,024 EU (27) in % of Europe 65.9 EU (27) in % of world 16.4 4

A comparison of the ten leading egg producing EU member countries in 2000 and 2006 (table 5) shows that the regional concentration has further increased. In 2006, the top ten hen egg producing countries contributed over 85 % to the production volume of the EU. The share of the four leading countries was as high as 47.7 %. The composition and ranking of the top ten countries has not changed very much, the Czech Republic was replaced by ; Spain,, and changed their positions. In contrast to hen eggs, the development of poultry meat production has been much more dynamic (table 6). Broiler meat production increased by almost 3 mill. t or 53.4 % in the analysed time period. The highest relative growth rates showed duck and turkey meat production. The production volume of goose and guinea fowl meat reached a peak in the early 1990s, from then on, a continuous decrease can be observed. This is mainly due to the stagnating or even decreasing per capita consumption. Table 5. The ten leading hen egg producing countries in the EU (27) in 2000 and 2006 (Source: FAO database, ZMP 2006). 2000 2006 Production Share Production Share Spain Un. Kingdom Romania Belgium Czech Repub. 1.039 893 846 811 669 632 424 263 194 188 14.4 12.4 11.7 11.2 9.3 8.8 5.9 3.6 2.7 2.6 Spain Un. Kingdom Romania Belgium 850 850 746 700 595 595 537 355 244 161 12.9 12.9 11.3 10.6 9.0 9.0 8.1 5.4 3.7 2.4 10 countries 5,959 82.6 10 countries 5,633 85.3 EU (27) 7,212 100.0 EU (27) 6,605 100.0 Table 6. The development of poultry meat production in the EU (27) between 1980 and 2006 by meat type; data in 1,000 t (Source: FAO database). Meat 1980 1990 2000 2006 Increase type Broiler* Turkey Duck Goose** 5,512 681 136 56 6,194 1,235 223 81 8,262 2,037 410 75 8,455 1,712 422 72 53.4 151.4 210.3 28.6 Total 6,385 7,733 10,784 10,661 67.0 From the data in table 7 one can see that in two EU member states, the United Kingdom and, over 1.5 mill. t of poultry meat were produced in 2006, followed by three countries with a production volume of over 1 mill. t (Spain,, ). Together these five countries contributed almost 59 % to the production volume of the EU (see also figure 3). The contribution of the EU (27) to global meat production varied between only 1.1 % for duck meat and 29.5 % for turkey meat. In total, EU member states in 2006 had a share of 12.5 % of the global production volume. 5

In contrast to hen eggs, the development of poultry meat production has been much more dynamic. Broiler meat production increased by almost 3 mill. t or 53.4 % in the analysed time period. The high-est relative growth rates showed duck and turkey meat production. The production volume of goose and guinea fowl meat reached a peak in the early 1990s, from then on, a continuous decrease can be observed. This is mainly due to the stagnating or even decreasing per capita consumption. Table 7. Poultry meat production in the EU (2006) by meat type; data in t (Source: FAO database). Chicken meat Turkey meat Duck meat Goose and guinea fowl meat Total United Kingdom 1,331,276 206,031 41,654 2,935 1,581,896 819,383 501,127 233,370 2,410 1,556,290 Spain 1,047,575 21,000-1,068,575 608,418 375,996 38,514 1,715 1,024,643 960,000 25,000 16,000 9,200 1,010,200 628,474 273,816 12,608 914,898 635,000 61,538 14,000-710,538 Belgium 484,000 6,800-490,800 240,800 108,018 39,657 33,975 422,450 Romania 265,690 - - 265,690 Portugal 193,427 45,000-238,427 Czech Republic 207,130 10,382 10,089 3,000 230,601 Denmark 166,400 92 4,571 45 171,108 Greece 144,395 1,846 126 147 146,514 Ireland 98,472 30,398 2,400 1,280 132,550 Austria 88,000 25,500 100 200 113,800 Sweden 107,547 1,996-109,543 Finland 97,960 - - 97,960 Bulgaria 72,807 92 18,798 581 92,278 Slovakia 86,113 804 1,032 260 88,209 Slovenia 51,000 10,979 1,200 3,900 67,079 Lithuania 56,500 3,925 190 179 60,794 Cyprus 26,951 1,259 220-28,430 Latvia 20,608 - - 20,608 Estonia 12,789 - - 12,789 Malta 3,935 215-4,150 Luxembourg 122 - - 122 EU (27) 8,454,772 1,711,814 421,921 72,435 10,660,942 Europe 10,907,841 1,731,828 422,583 74,285 13,136,537 World 73,057,466 5,797,749 3,846,250 2,528,055 85,229,520 EU (27) in % of Europe 77.5 98.8 99.8 97.5 81.2 EU (27) in % of world 11.6 29.5 1.1 2.9 12.5 6

The regional concentration in poultry meat production is very high for all meat types as can be seen from tables 8 and 9. Over 99 % of the duck, goose and guinea fowl meat are produced in the ten lead-ing countries, almost 97 % of the turkey meat, and 83 % of the chicken meat. A closer look at the ranking shows specific differences. Table 8. The ten leading chicken and turkey meat producing countries in the EU (27) in 2006 (Source: FAO database, ZMP 2006). United Kingd. Spain Belgium Romania Chicken meat* Production 1,331 1,048 960 819 635 628 608 484 266 240 Share 15.7 12.4 11.4 9.7 7.5 7.4 7.2 5.7 3.1 2.8 United Kingd. Portugal Ireland Austria Turkey meat Production 501 376 274 206 108 62 45 30 26 25 Share 29.3 22.0 16.0 12.0 6.3 3.6 2.6 1.8 1.5 1.5 10 countries 7,019 **83.0 10 countries 1,653 96.6 EU (27) 8,455 100.0 EU (27) 1,712 100.0 * includes meat of layers; ** sum does not add because of rounding. Table 9. The ten leading duck, goose and guinea fowl meat producing countries in the EU (27) in 2006 (Source: FAO database, ZMP 2006). United Kingd. Bulgaria Czech Rep. Denmark Ireland Duck meat Production 233 42 40 39 19 16 14 10 5 2 Share 55.2 10.0 9.5 9.2 4.5 3.8 3.3 2.4 1.2 0.5 Goose and guinea fowl meat Production Share 34 47.2 13 18.1 9 12.5 Slovenia 4 5.5 Czech Rep. 3 4.2 United 3 4.2 Kingd. 2 2.8 2 2.8 1 1.4 Ireland 0.6 0.8 Bulgaria 10 countries 420 *99.5 10 countries 71.6 *99.4 EU (27) 422 100.0 EU (27) 72 100.0 * sum does not add because of rounding. In chicken meat production, the United Kingdom ranks at first place with a share of 15.7 %, followed by Spain and. Two other new member states, Romania and, rank as numbers 9 and 10 (figure 4). In turkey meat production, the regional concentration is even higher. Here, the leading countries, and, contributed over 51 % to the production volume of the EU (27). The four top 7

producing countries had a share of more than 79 %. and are also to be found among the ten leading turkey meat producers with a share of together 7.8 % (table 8). is dominating duck meat production in the EU with a share of over 55 % as can be seen from table 9, followed by the United Kingdom, and. Four of the ten leading countries are new member states. Together they contributed 20.2 % to the production volume of the EU. Goose and guinea fowl meat is mainly produced in,, and. These three countries had a share of almost 78 % in 2006. The six new member countries ranked among the top ten contributed about 70 % to goose and guinea fowl production in the EU. A long tradition of goose production in and is the main reason for this dominating position. 3. Conclusions The main results of this introductory analysis can be summarized as follows: After three decades of growth, the number of produced broilers, turkeys, ducks, and geese de-creased between 2000 and 2006 due to the impacts of Avian Influenza outbreaks and an over-supply on the turkey meat market; The downward trend of layer flocks could be stopped except in,, the Nether-lands and in some East European and Baltic countries; In the EU (27), a close correlation between the population of a member state and its poultry flocks as well as its egg and poultry meat production can be observed with the exception of the. In spite of a comparatively low population they rank in top positions with regard to production and exports; In the EU (27), the organisation of egg and poultry meat production differs considerably. Whereas contract growing is the dominating broiler and turkey meat production, vertically in-tegrates agribusiness companies are in a leading position in many countries in egg production (c. f. final report of WP 3); and The consolidation in the poultry industry initiated a regional concentration process. Densely populated poultry areas with a high competitiveness but also with a high risk regarding the in-troduction and dissemination of highly infectious diseases are the result in several EU member states (c. f. Grabkowsky, Geenen, Windhorst, Saatkamp 2008; this report). References FAO database: http://faostat.fao.org 8

Appendix Figure1 Distribution of poultry total in Europe (2006) Figure 3 Poultry meat production in Europe (2006) Figure 2 Distribution of layers in Europe (2006) Figure 4 Chicken meat production in Europe (2006) 9